Alfie, Bill, and Coco each value police protection differently. Alfie’s demand for the public good is Q = 55 - 5P, Bill’s demand is Q = 80 - 4P, and Coco’s demand is Q = 100 - 10P. The marginal cost of providing police protection is $13.5.
a. What is the socially optimal level of police provision?
b. If each voter pays one-third of the total bill for police protection, how much will each voter wish the community to buy?
c. If the median voter wins, how much will the community buy?
d. If the median voter wins, will the allocation be efficient? Over-provided or under-provided? Explain.
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Alfie, Bill, and Coco each value police protection differently. Alfie’s demand for the public good i...
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